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On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Mike, three points about the wind vs. nuclear buildout in China:

1. Capacity factors. Chinese capacity factors are much lower than those achieved in the US - about 26% without curtailment and about 23% with curtailment. A good breakdown is given in this TEC article. Sure, capacity factors will improve over time as towers get taller and rotor diameters get increasingly oversized, but this will be a slow process. Using data from the BP Statistical Review, it can be calculated that the global average wind capacity factor has increase marginally from 21.4% in 2000 to 23.7% in 2013. You can verify this yourself using the BP data. The US is way above the average, mainly due to the excellent wind resources in the central states, but China is pretty average. 40% is therefore not a realistic number to use for generation projections. 

2. Subsidies. With enough support, deployment can evade economic realities for many years, but this usually does not end well. The great German Solar PV expansion followed by a 50% drop last year and a 40% drop so far this year is a good example. The typical boom-bust of US wind in response to the PTC is another. As stated before, China currently pays $83-100/MWh in tariffs for intermittent wind which also requires large additional investment in high voltage transmission lines - double that received by dispatchable thermal and hydro generation. Obviously, this trend is not sustainable in an economy that relies so heavily on cheap energy. As outlined in the previous TEC article I linked, cracks are already starting to appear in the support structure. 

3. Nuclear scale rate. According to data provided by the World Nuclear Association, China has completed 3.2 GW of nuclear in the past year (June through June) and begun construction on 5.7 GW. In total, China now has 33 GW of nuclear under construction. Nuclear construction in China takes 4-6 years, implying that we can expect an average of 5-6 GW per year for the next couple of years - an order of magnitude slower than the coal buildout achieved in the mid 2000s when the Chinese economy was still half the size it is today, but still quite impressive. Using real-world Chinese wind capacity factors, this puts nuclear generation on a similar path to wind. 

Only time will tell how long it takes for the fundamental advantages in terms of cost, dispatchability and grid connection of nuclear over wind to be reflected in the data. Naturally, the long construction times of nuclear energy has caused a delayed response to the great Chinese war on pollution declared a few years back while the modular nature of wind allowed for more rapid scaling. However, as illustrated by the bulging Chinese nuclear construction pipeline, this trend is set to change soon.

About the CCS scale rate, anyone who has studied the IEA and IPCC rapid decarbonization scenarios will know that the real CCS buildout only starts in the next decade (if the world manages to commit to the 2 deg C target in some shape or form). CCS does not have the ideological appeal necessary to win large subsidies and will have to wait until the world gets serious about climate change. Please see the second and third figures in the previous article in this series where I put the scale of the required CCS rollout in perspective using wind energy. The result really is quite striking. 

July 26, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Good, if you now halve your estimate again you will arrive at the real number by which wind grew faster than nuclear in China in 2013 according to the BP Statistical Review: 2.72 (35.9 TWh/year growth in wind vs. 13.2 TWh/year growth in nuclear). 

But this thread is becoming too narrow. Let's continue the discussion on top. 

July 26, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Of course, but the topic here was the potential scaling rate. In a very rapidly growing economy where power is needed to further drive the expansion, technologies with low up-front costs are valued very highly. In LCOE terms, this can be accounted for by the use of a very high discount rate. For example, during the middle 2000's when Chinese electricity generation expanded by 15% p.a., the effective discount rate driving energy decisions was probably very high simply because power today was valued so much more than power next year. 

Sure, if a discount rate of 5% is used, the nuclear LCOE in China is similar to that of coal, but, as discussed in my comment to Fred W below, this is not the right number to use. China will need a continued very rapid expansion if it is to achieve its goal of getting rich before it gets old. The role of coal in the expansion will certainly deminish as the Chinese economy modernizes and the war on pollution picks up speed, but its incredible scalability will continue to be a major driver of growth. 

July 26, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Thanks for the references, but I was actually looking for numbers to back your calculations that wind currently scales 12x faster than nuclear in China. Please explain to me the vast difference between my estimations in point 1 above and your 12x number. As you probably know, China has goals for 200 GW of wind and 58 GW of nuclear by 2020. Adjusting from capacity to generation based on existing data (as above) puts nuclear and wind on equal terms in 2020. 

The rise in Chinese wind power can be explained by lucrative FiT of $83-100/MWh although it is unclear how long these tariffs can be sustained due to large fund shortfalls. Such fixed subsidies are ideal for wind because it ignores the lower value caused by intermittency. Higher value nuclear gets a tariff of $70/MWh which should still drive rapid deployment due to good economics, albeit with a time-lag due to long construction times. My analysis in the article is based on unsubsidized costs as outlined in my first reply to you. 

Your question about CO2 storage from CCS is already answered in my comment to Bob below. The 55 Mton of anthropogenic CO2 stored thus far is about a third of the total CO2 avoided by total solar PV generation of 370 TWh by the end of 2013 (BP) under the assumption of natural gas displacement at 0.4 ton/MWh, no rebound effect (displaced fossil fuel just burned somewhere else) and no price driven gas-to-coal switching (e.g. Germany). Considering that global commitment to CCS demonstration activities is currently $20.7 billion (source) and Germany alone has already committed more than €100 billion to solar PV subsidies, this is not bad at all. 

July 25, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Ah, thanks Ed. I'm suddenly not so worried anymore :-)

The economics are certainly very attractive - just over $4/MMBtu which puts it right on par with US shale gas. How much cost do you estimate a CCS retrofit will add? I assume the coal to SNG process will produce a fairly high purity CO2 stream which makes CCS cheaper? 

July 25, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

For power plants, I see the bridge element as the possibility to retrofit the enormous new fleets of coal fired plants currently being built in the developing world. The potentially very dangerous Chinese SNG buildout will also be an excellent target for retrofits. If the 2 deg C target ever becomes a serious consideration, retrofits will be an essential bridge without which there will be a lot of value destruction in countries that really cannot afford it. 

Most existing CCS projects are based on industrial processes delivering relatively high purity CO2 streams. Coal plants will only come later as outlined in my comment to Bob below. But coal plants are extremely expensive in the US at present and the EIA also uses higher financing costs in their calculations amounting to about $15/MWh extra to the LCOE of coal and CCS. Coal fired CCS is targeted more towards the developing world where even a the 50% LCOE increase caused by Gen I CCS would still keep coal competitive. 

As Ed said below, steel and cement are quite far down the economy scale and there are lower hanging fruits which will be exploited first such as natural gas processing and fertilizer production. 

July 25, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Thanks for the advice, Mike. In exchange, I would like to offer some to you as well. 

1. Without references, your numbers will not be taken seriously. Impirical data from the BP Statistical Review shows that China got 131.9 TWh from 91.5 GW of wind capacity and 110.6 TWh from 18 GW of nuclear capacity (nuclear capacity given here). Given this data, please tell me why I should believe that 9 units of wind generate as much as 4 units of nuclear. Also, China already has an additional 28 GW of nuclear under construction (see previous link), most of which will probably come online within the next 3 years. Based on the data above, wind will require about 100 GW of capacity over the next three years (double the installation rate of 2013) to match this scaling rate (let alone beat it by a factor of 12). 

2. Relatively small mandated/subsidized deployment of wind energy (6.7% of the increase in Chinese energy consumption in 2013) facilitated by an economy powered 70% by coal is not proof of scalability. For some empirical evidence on nuclear vs. wind/solar scalability, see the final graph in this article. The day that wind can scale like nuclear in the referenced graph without subsidies (i.e. not dropping 92% when the PTC is removed), I will change my view on this matter. 

3. Don't accuse others of cherrypicking (without specifying the cherry) when you do it yourself. In an earlier article in this series, you used very high costs for CCS (presumably medium scale FOAK deployment) which are not reflected in more generic and credible sources to make sweeping statements about the feasibility of CCS. 

4. To allow for truly informative discussions, please comment on the central argument of an article, in this case the postulate that wind/solar/nuclear is not capable of meeting the energy needs of the developing world within the recommendations given by climate science. This nuclear vs. wind sideshow is of much lower value. 

5. The superior tone with which you comment does not help the communication of your message. We are trying to remain as objective as possible in our exchanges using the best information we have available to us at any given time. Clearly subjective language obstructs this process. 

July 25, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

It is not exactly customary to reference the conclusions you draw based on analysis of published data. The published data in this case is the up-front capital cost (proxy for the labor, expertise, materials and energy required to establish a given piece of energy infrastructure) of various energy technologies in the developing world. References: IEA, BNEF and ILAR.

Let's take the example of a rapidly growing country (like China or India) that wants to drive 10% p.a. growth in its electricity consumption. Say the options of coal, nuclear and wind are evaluated with capital costs of $700/kW, $2200/kW and $1200/kW respectively and capacity factors of 80%, 90% and 25% respectively. This puts the capacity factor weighted capital expenditures for coal, nuclear and wind at $875/kW, $2444/kW and $4800/kW respectively. Thus for a fixed amount of yearly input in terms of labor, expertise, materials and energy nuclear generation can be expanded twice as fast as wind and coal can be expanded 5 times faster. This difference is very important in the developing world where rapid expansions in electricity generation are required to drive economic development (and the ability to deploy further energy infrastructure). 

Also, as mentioned in the article, about half of Chinese coal consumption is in sectors outside of electricity production where there is no competition from nuclear, wind or solar. And then of course there is the intermittency issue which may well negate future cost reductions of wind/solar as their penetrations increase. See my articles on this topic here and here

Lastly, I don't have a distaste for renewables in general, only for the marketing of renewables as the primary solution to climate change. My comments regularly state that wind/solar are good in ideal locations like the central/south-west US. If not for climate change, wind/solar technology forcing would only cause a mild decrease in economic development, but, if climate science is correct, wind/solar technology forcing represents a severe malinvestment (e.g. this OECD study which found that feed-in tariffs cost 17x more than emissions trading schemes per unit of CO2 avoided). The recent IPCC report also found that a low wind/solar future has essentially no impact on the cost of deep carbonization, while elimination of CCS would double the costs (discussed in the previous article in this series). 

July 24, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Thanks for the comment, Bas. Could I ask you to classify yourself in one of the six climate change opinion categories presented in the short video on the right hand side of this page? It will help me to better put your comments into perspective. 

About hydrocarbon synfuels, I agree about the potential if we eventually get a lot of super-cheap wind/solar production peaks. The next Seeking Consensus article will be about synfuels and it appears to be the most promising modern storage technology available. However, I again have to point out that Denmark is a special case (20x smaller electricity generation than Germany and surrounded by large hydro capacity), so the Danish case does not offer generic proof of the scalability of intermittent renewables to higher penetrations. 

About the current economics of wind/solar vs nuclear, official data contradicts your statements. Economics in the developed world are fairly similar (see the US case for example) with the wind/solar greatly outperforming nuclear mostly due to political factors. In the developing world (mostly China and India), nuclear capacity costs less than double that of wind and solar (below ~$2000/kW - see here and here). When considering the capacity factor, this makes nuclear at least two times cheaper than wind/solar. However, the modular simplicity of wind/solar makes it much easier to install, thereby driving higher deployment rates in China. 

Battery costs will have to fall by at least an order of magnitude before it becomes applicable to anything other than low-volume niche applications (see my recent analysis here), so I'm afraid that proclaiming solar+batteries to be cheaper than nuclear is completely false. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Yes, I knew that this article would make me somewhat unpopular with nuclear advocates on TEC. However, when considering that I see nuclear as a sustainable energy option first and a greenhouse gas mitigation option second, my praise is not faint and (I still think) my critisism is valid.

I think Gen IV reactors, especially fast reactors, have the potential to take our global society to the next level because they essentially simultaneously increase the nuclear resource by two orders of magnitude and remove all the factors driving current societal resistance (waste, prolifiration risk and safety). However, these reactors are only projected to reach commercialization in the 2030s and will probably get off to a slow start. By that time, the world would probably already have overshot the 450 ppm target with CO2 emissions still increasing. 

My nuclear critique is only directed at claims that Gen III reactors can play a dominant role in achieving the 2 deg C target. This would require an unprecedented nuclear renaissance starting right now and proceding up to the 2030s when Gen IV reactors seemlessly take over - something which I think is essentially impossible. Gen III reactors offer only evolutionary improvements over Gen II and will therefore face similar societal headwinds to deployment. For nuclear to reach its potential, we need the revolutionary improvements promised by fast reactors. 

July 23, 2014    View Comment    

On Renewable Energy Provides 56 Percent of New Electrical Generation Capacity in First Half of 2014

What is the reason for the extremely low wind buildout? The miserly 699 MW installed thus far in 2014 is even worse than last year - the year when the US wind install rate slumped by 92% (similar to previous instances of a cancellation of the PTC). Will the impact of the latest boom in the typical boom-bust created by the PTC only be felt during the second half of 2014 and 2015?

Solar also seems to have broken the trend of rapid increases in deployment rates with the 2014 numbers being slightly lower than the 2013 numbers. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Sure, the older Chinese coal plants are very bad, but there has been a clear global trend towards more efficient plants and also to supercritical and ultra supercritical technology. Younger fleets (such as that of China) will inevitably be more efficient and cleaner than older fleets. The IEA capital cost report linked in the article assumes a rather remarkable 46% efficiency for (still incredibly cheap) new Chinese coal capacity. 

For instance, from the 2014 Energy Techology Perspecitves report:

"The efficiency of generation is increasing. Globally, 64% of plants under construction are supercritical or ultra-supercritical, up from 50% in 2012. More than 60% of subcritical units under construction are in India. Between 2006 and 2010, China retired 77 GW of old inefficient plants, with a target to retire a further 20 GW by 2015."

You can also have a look at this information sheet from the previous ETP report. It is shown that, since the turn of the century when China initiated the global coal explosion after joining the WTO (Chinese coal consumption tripled since 2001), there has been a large increase in investment in supercritical and ultrasupercritical technology as well as a marked increase in the efficiency of all technology classes.

Thus, the majority of the Chinese fleet (built after 2001) is substantially more efficient and clean than the global average (therefore my comment that "the Chinese coal fleet is mostly..."). As stated above, they are also actively retiring old inefficient and dirty plants at a very rapid rate. 

July 23, 2014    View Comment